Performance Shipping wipes slate clean

The company, previously known as Diana Containerships, bought the remaining shares back from Kalani Investments.  This marks the end of a major transition for this listed subsidiary of Diana Shipping, Inc.

I was never a fan of the original concept to enter the containership segment and purchase speculatively containership assets.  This a popular fad at the time with dry bulk companies.  Paragon did the same thing and it was also a failure, along with Paragon that was completely run into the ground.  The CFO, who understood the issues, quit and moved on.  Investors lost their money. 

Diana had better management,  It has weathered many storms, but it has never been a block buster for investors.  Dry bulk has been a tormented sector for many years now.  None of the listed companies in this sector have been very profitable.  Many have disappeared.  Some like Genco has undergone bankruptcy and restructuring.  Eagle was bought out by distressed asset investors.  In comparison, Diana has been a survivor.

Moving from dry bulk to being a containership provider company to liner companies was always a weak proposition with challenges even more daunting than dry bulk.  So why waste money and management time?  Better to focus on what you know and try to maximize it.  As I remarked at the time, Simos Palios could never replicate Gerry Wang at Seaspan at the time.  He lacked to mojo for this.

One has to give credit to Simos Palios and his management that they did not leave their subsidiary to fester as in the case of Paragon.  They took steps to deal with the problems and transform the company to something better.  They were also aided by luck as always needed in these entrepreneurial decisions.  Moving to crude tankers, they had some success.  Tanker markets are booming now with the low oil prices with extremely good freight rates.

The Kalani involvement was out of financial necessity at the time, but now the company is past this and in a position to redeem the preferred shares involved. 

Performance Shipping is clever renaming of the company.  It puts the emphasis for investors where it should be: good earnings results in profitable sectors.